Copyright law regarding devices that make copies of digital recordings is set forth in 17 U.S.C, Chapter 10, referred to as the “Digital Home Audio Recording Act of 1992.” Specifically, this Act requires payment of specific royalties to the Register of Copyrights. Royalty payments for digital audio recording devices are 2% of their transfer price, and royalty payments for digital audio recording media are 3% of their transfer price.
Copyright law regarding Internet service providers is set forth in the Digital Millennium Copyright Act of 1998.
Consumers are generally aware to some extent of copyright laws concerning digital recordings, but there are no automatic features in place to assist consumers in abiding with them. For example, a consumer who purchases a song on a CD, or through a subscription with an Internet music sharing service such as Napster, generally does not know if he is permitted to make personal copies of the song for himself, on one or more of his computers, or on one or more CDs, or on one or more MP3 players.
It would be beneficial if a system was in place to advise consumers whether or not a song may be copied for specific uses, and, if so, how many copies are permitted, and, if not, how to obtain the necessary copyright permission.